Estonian exporters grow with KredEx Krediidikindlustus help
Estonian exporters are starting to discover and take advantage of new financial solutions to improve competitiveness on the international market and at the same time grow their business safely in Estonia. In cooperation with KredEx Krediidikindlustus, exporters can now use an export loan and credit insurance, allowing companies to organise financing for their foreign clients.
Mariko Rukholm, Member of the Management Board of KredEx Krediidikindlustus, points out that compared to ten years ago, Estonian companies now have a number of options and solutions to boost their exports, from hedging their foreign partners’ payment risks through insurance, all the way through to organising financing for their clients.
According to Rukholm, it is the second option that has been used for a long time by our exporters’ foreign competitors, but is still a new and unexplored terrain in Estonia. “For instance, if a company wishes to invest in machinery, equipment, or an expensive IT project, it must also consider financing. The exporter can now make the purchase easier for the buyer and also provide financing,” Rukholm explained. He added that companies have to think about these types of solutions when making an offer, in order to maintain their competitiveness among other tenderers.
“The first companies in Estonia have now tested this option and have been able to offer their customers a long-term payment term. through the use of an export loan and credit insurance. As it has proven to be a convenient alternative for foreign partners, our companies have concluded significant deals in this way and thus increased their exports,” Rukholm said, adding that besides this relatively new solution, companies have started to insure themselves more naturally against partner-related payment risks. Unpaid invoices are important company assets in the same way that production buildings or equipment are important.
Shipbuilding company Baltic Workboats: sailing on foreign markets has to be ambitious but safe
One of the users of KredEx Krediidikindlustus’ new solution is shipbuilding company Baltic Workboats, based in Saaremaa, which was recognised by KredEx Krediidikindlustus with the title Export Deed of the Year 2017.
Today, Baltic Workboats is the only major large-scale shipbuilder in Estonia, constructing aluminium and steel-hulled ships of up to 100m in length using the turnkey principle. “Our work begins with drawing up a design based on the client’s wishes, followed by model testing, and ending with the final finish, setup, and transfer of the boat,” said Jüri Taal, Member of the Management Board of Baltic Workboats, explaining the process of shipbuilding, with the entire construction process done in the village of Nasva.
Vessels built on Saaremaa are also special in that the people of Saaremaa generally do not build ships of similar designs. “Every ship built by us is unique, because it is manufactured based on the client’s needs,” explains Taal. “We are constantly implementing innovative solutions in order to improve the hydrodynamic features of ships, and we use materials and equipment that make the handling of the ships safer and more comfortable.”
The ability to develop solutions according to the client’s individual needs has brought Baltic Workboats a number of interested customers including national authorities, private companies, and universities, which, according to Taal, have ordered passenger and auxiliary ships, as well as vessels for patrolling, pilot work, and marine research. In Estonia, there are a number of passenger vessels built by Baltic Workboats operating between Saaremaa and Hiiumaa, Kihnu and Vormsi, and on routes to the smaller Estonian islands.
At the same time, Jüri Taal notes that international orientation and exports are keywords for Baltic Workboats today. He explains that there are vessels built by the company sailing on the Baltic Sea, Mediterranean Sea, Black Sea and Caspian Sea. Baltic Workboats has also built ships for markets in Germany, Belgium, Sweden, Finland, Latvia, Lithuania, Austria, Bulgaria, Romania, Croatia, Denmark, Northern Ireland, Kazakhstan, Azerbaijan, Russia, Poland, Ukraine, the United States, and Bangladesh.
In order to increase exports in an ambitious yet safe way, Baltic Workboats has looked for and has begun to use a range of new financial solutions, and they have also helped their clients to organise necessary financing with the help of KredEx and KredEx Krediidikindlustus.
“Knowing that we can hedge the potential export risks and increase our export volume, by using the various solutions that have been developed by SA KredEx and AS KredEx Krediidikindlustus, has helped us to act in a more daring way and to set more ambitious goals,” confirmed Taal. The company was awarded the Export Deed of Year by KredEx Krediidikindlustus for entrepreneurship and their use of new solutions during expansion.
“Baltic Workboats stood out in particular from the other exporters because they have increased their production capacity on the go and have concluded many major export agreements with partners, which not only speaks to the high shipbuilding competence of their people, but also puts the entire Estonian shipbuilding industry on the global map,” said Mariko Rukholm, Member of the Management Board of KredEx Krediidikindlustus, who presented the award.
Even though the competition on international markets is tight, Jüri Taal believes that growth and expansion are in store for Baltic Workboats in the near future, mainly in North and South America, the Middle East, and Southeast Asia. The company also plans to expand their portfolio on the European market—for example, in the direction of the defence industry—and to boost their production capacity further.